Chapter 12 Vocabulary

A system of accounting where all revenues and expenses are matched and reported on financial statements for that specific period; regardless of when the cash related to the transaction is received or paid.

• Deferred Expenses

• Accrual Basis

• Accrued Income

• Accrued Expenses

Expense items that relate to the current period but have not yet been paid and do not yet appear in the accounting records.

• Accrual Basis

• Deferred Income

• Updated Account Balances

• Accrued Expenses

Income that has been earned but not yet received and recorded.

• Accrued Expenses

• Unearned Income

• Accrued Income

• Accrual Basis

Expense items acquired, recorded, and paid for in advance of their use.

• Deferred Expenses

• Accrual Basis

• Deferred Income

• Accrued Expenses

Income received before it is earned.

• Deferred Income

• Accrual Basis

• Updated Account Balances

• Accrued Expenses

A form used to list the quantity and type of goods a firm has in stock.

• Net Income Line

• Updated Account Balances

• Inventory Sheet

• Accrual Basis

Long-term assets that are used in the operation of a business and that are subject to depreciation

• Accrual Basis

• Accrued Income

• Net Income Line

• Property, plant, and equipment

Income received before it is earned.

• Property, plant, and equipment

• Accrued expenses

• Unearned Income

• Accrued Income

The worksheet line immediately following the column totals on which net income or loss is recorded on the Income Statement and the Balance Sheet.

• Inventory Sheet

• Net Income Line

• Updated Account Balances

• Accrued Expenses

The amounts entered in the Adjusted Trial Balance section of the worksheet.

• Accrued Expenses

• Accrued Income

• Updated Account Balances

• Deferred Income